DrKW Is 'Back In The Field'

German insurer Allianz posted its second straight quarterly profit last week. Net revenues came in at $438m. The insurer's banking division, basically Dresdner Bank, however, revealed losses of $20m in the period. But Dresdner's investment banking arm, Dresdner Kleinwort Wasserstein (DrKW), continued along the road to recovery and pulled in $81.1m profit in the quarter. At least at DrKW, the good times are beginning to roll.

According to Reuters, DrKW has now posted profits of $331.7m for the first nine months of the year. The firm is now seeing the benefits of the cost reductions made in the last two years - headcount is said to have fallen by 2,000 to 6,500 during this period. The business has been able to attract 'a few good men' at the top, and the markets have recovered. Although fixed income revenues are perhaps not as strong as they have been, DrKW has performed well in this area throughout the year and equities, too, is thought to have put in a respectable showing. The firm appears to have a rosier future with Andrew Pisker at the helm.

Notwithstanding Allianz's recent comments that it will stand by DrKW, the relatively strong performance of the firm this year has prompted further speculation about its future. The latest rumours involve a management buy-out and a sale to BNP Paribas (BNP). A management buy-out at this time would make sense for the management and could be good news for the staff. Management will have a clear view of the potential of the business and the price would be cheaper now, before the real money starts to roll in.

But why would Allianz do a deal now ? The insurer has experienced the pain and now wants to benefit from the gain. A sale to BNP Paribas can also be ruled out for the same reason. Add to that a potential culture clash (the French bank is, after all, French) and the fact that Pisker himself came over from BNP not too long ago, and a deal looks unlikely.

Reuters quotes David Waller, head of DrKW's corporate communications, who said that the firm is 'back in the field'. After all the trials and tribulations of the last three years, staff at DrKW will be grateful that, at last, they are actually operating on a level playing field - and the future looks bright.

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